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Hiring Summer Interns: Program Basics and Legal Issues - Part 1

In anticipation of summer hires, employers may want to familiarize themselves with the federal laws outlining child labor restrictions. Under the Fair Labor Standards Act (FLSA), the U.S. Department of Labor (USDOL) has issued youth employment regulations. While there are some exceptions, generally "youth" are entitled to minimum wage and overtime, but the FLSA includes other protections in the form of when and what a minor can do.

OVERVIEW

An internship is work by an intern for free or for the applicable minimum wage in exchange for exposure to, and training in, a particular field of work. This article presents a conceptual, legal and practical treatment of employing interns. It highlights the business case for offering internships, including the benefits for both the employer and the intern. The article then discusses HR's role in implementing and managing an internship program, as well as global, communication, technology and legal issues.

The principal legal issue with internships is whether the organization must pay the intern anything at all. For private-sector employers in the United States, the answer is almost always yes. Generally, the intern should be paid at least minimum wage as well as overtime. The U.S. Department of Labor (DOL) recognizes very narrow exceptions to the requirements of the Fair Labor Standards Act (FLSA) for private-sector internships in for-profit organizations. Public-sector employers and nonprofit organizations, however, are given greater latitude in determining whether to pay interns anything at all. The article provides a thorough discussion of this topic, with particular emphasis on FLSA compliance.

BACKGROUND

Historically, the concept of internship originates from the labor movement concepts of apprenticeship back to the guilds of the Middle Ages. It is a tried and true way of training personnel and of picking people for future employment. It is a symbiotic relationship between the intern and the employer. See Internships Under the Fair Labor Standards Act.

Typically, interns are young persons in college or high school courses. However, interns may also be older persons seeking new careers, ways to help their communities or interesting ways to spend their time in semi-retirement.

Internship is a longstanding means by which individuals can improve their basic knowledge, skills and abilities—known as KSAs—to obtain gainful employment in a particular field. Interns can benefit from a combination of networking opportunities and specialized education. In turn, employers can benefit from internships by obtaining inexpensive labor and, more important, by tapping into a pool of potential employees about whom the employer knows much more than can be derived from resumes or job applications. In addition, offering internships can give an employer brand recognition and status in the community, and it can provide the impetus for an organization to evaluate its human resource functions. Ideally, internships can be a win-win arrangement for both interns and employers.

Employers may be tempted, however, to take advantage of young, inexperienced persons by having them work for free at jobs the employer would otherwise have to pay for. This is especially true in a recessionary economy in which job seekers outnumber the jobs available. This temptation should be avoided—for the sake of both the employer and the intern.

Internships can be offered in various settings:

  • Governmental departments or agencies.
  • Professions such as medicine, law, accounting and religion.
  • Industries such as radio, television, filmmaking, financial services and human resources.
  • Charitable organizations.
  • Educational institutions.
  • Arts organizations.

BUSINESS CASE

The business case for creating an internship program is strong:

  • Employers of interns obtain inexpensive labor at the cost of giving training to the interns. Interns typically work part time for minimum wage for a short period of time and without benefits.
  • Employers acquire ready access to a pool of potential hires.
  • Employers obtain much better knowledge of prospective employees' KSAs by watching the interns in action than by simply reading resumes or job applications.
  • Employers can gain brand recognition and community oneness through internship programs, as well as improve employee morale.
    • An employer can attract positive attention from the news media reporting on the start and finish of the internship program for high school or college students, introducing the interns and discussing how their nascent talents could lead to employment at the organization in the future.
    • Often, interns are related to current employees. The possibility that a relative could land an internship with an organization can boost its employees' productivity and job satisfaction.
    • An internship program can be a key component of an organization's diversity efforts.

Overall, an employer's internship/outreach program could turn out to be the source of its next great employee. Just as an internship program can be a plus for employers, it can, and should, be of great benefit to interns:

  • Interns can gain a real-world view inside a particular industry or job before they devote significant time and money to qualify themselves for such positions. This may help them eliminate wasteful "false starts" in their educational and career choices.
  • Interns can gain realistic expectations about workplace demands and rewards.
  • By acquiring organizational knowledge, an intern can be at a competitive advantage over job applicants without internship experience.
  • Similarly, an internship can be viewed as an expanded job interview; the intern has ample opportunity to display his or her best attributes to a potential employer over an extended period. The typical job applicant, on the other hand, may have only two or three hours of time with the organization before the hiring decision is made.
  • Even if an internship does not blossom into a regular position with the organization, the intern will enlarge his or her network of contacts in the working world and will probably be able to add a few names to his or her list as references when applying for positions elsewhere.

HR'S ROLE

HR's role concerning internship programs depends on the situation. If an organization has no internship program, then HR's first task is to convince upper management of the wisdom of establishing one. Making that case will entail coming up with some specifics on organizational needs, wages, hours, policies, legal issues and metrics. The specifics of a new internship program will probably focus mostly on how it would benefit the employer in the short term. With established internship programs, the specifics will center on the quality of the experience for the interns and the strategic benefits for the employer over the long term.

HR is the functional unit that is primarily responsible for the effective management of an internship program. HR should take a hands-on approach to ensuring a proper balance between the employer's interests and the intern's. HR should hold periodic meetings—separately—with each intern and the intern's supervisor to assess how the internship is going. Such meetings are similar to the standard exit interview except that they are ongoing. These conversations will give HR valuable insight into the human relations within an organization—insight that can go well beyond the scope of the internship program itself. An intern may tell HR details about the working experience that regular employees would be reluctant to talk about—such as bullying, harassment and dishonesty. Similarly, an intern may bring to light qualities in supervisors that HR and the supervisor's supervisor were only marginally aware of, such as compassion, ethical behavior, diligence, depth of knowledge, loyalty and creativity. An internship should be similar to a mentoring relationship.

It is the job of HR to use the feedback received from interns and supervisors to modify internship policies and procedures as necessary, to continually establish the business case for internships to upper management, and to continually improve the internship program.

COMMUNICATIONS

Communications can be an area in which employers can benefit, but also an area in which they can make mistakes. They should pay careful attention to drafting policies and procedures, as well as public announcements, regarding internships. An organization will not want to be seen as reneging on promises made to interns or as taking advantage of them.

METRICS AND TECHNOLOGY

At the outset of any internship program, it is important to establish a framework for determining whether the internship program has been successful. This is the realm of metrics. Here are possible goals of an internship program:

  • Identify one intern whom the organization would like to hire as the best candidate for a regular position.
  • Identify one intern whom the organization would like to hire as the best candidate to fill a position temporarily during a leave of absence by a regular employee.
  • Increase the number of positive press reports mentioning the organization during a specific period of time.
  • Enhance the organization's ranking in a best-places-to-work survey.
  • Obtain candid feedback about organizational problems and overlooked opportunities and talents.

The return on investment of an internship program will depend on the criteria the organization states and the integrity of its data. A human resource information system—HRIS—or a generic spreadsheet computer program may be useful in establishing the metrics needed.

The goals of an internship program should follow the SMART paradigm. The goals should be:

  • Specific, clear and understandable.
  • Measurable, verifiable and results-oriented.
  • Attainable.
  • Relevant to the mission.
  • Time-bound with a schedule and milestones.

For additional information about this blog, please contact your Poms & Associates broker, or send your question to us through “Ask Poms.”


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Disclaimer – Please Note:

This blog/material is provided for general information purposes only and is not a substitute for legal advice particular to your situation, and Poms & Associates, Insurance Brokers Inc. and the author expressly disclaim all liability relating to actions taken or not taken based solely on the content of this information.

The author makes every effort to offer accurate, and practical Human Resources management, employer, and workplace advice, both on this website, and linked to from this website, but he is not an attorney. The content on this site, while authoritative, is not guaranteed for accuracy and legality, and is not to be construed as legal advice. Additionally, employment laws and regulations vary from state to state and country to country, so the site cannot be definitive on all of them for your workplace.

When in doubt, always seek legal counsel or assistance from State, Federal, or International governmental resources, to make certain your legal interpretation and decisions are correct. The information on this site is for guidance, ideas, and assistance only.